SOA Exam P Sample Question 393
Study guide: Exam P-1
A homeowner purchases a policy from an insurance company covering losses from hurricanes and fires. Under the policy, the insurance company pays 1000 for each loss.
In each year, the number of hurricanes is Poisson distributed, with a common mean for all years. Similarly, for each year, the number of fires is also Poisson distributed, with a common mean for all years. A hurricane occurs on average once every 10 years, while a fire occurs on average once every 50 years. The numbers of hurricanes and numbers of fires in different years are all mutually independent.
Let T be a random variable representing the total payments made by the insurance company to the homeowner over the next 40 years.
Calculate the mode of T.
- A)
2000 - B)
3000 - C)
4000 - D)
4800 - E)
5000
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